The Joseph Group

So Your Plan Isn’t Working

September 16, 2020

“How do we fix the plan?” That’s a question those of us in the Retirement Plans business hear a lot. Let me start by saying that most of the time, the plan isn’t “broken” but may just need an injection of life. Often, a slight tweak to one (or two) of the key plan provisions will generally get the plan back on track. In other cases, simply providing targeted education on the benefits of saving for retirement and/or taking advantage of the current plan provisions will provide the needed shot in the arm.

In Stephen Covey’s Habits of Highly Effective People, he lists Habit #2 as “Begin with the end in mind.” Under that premise, think about what you ultimately want to accomplish with the retirement plan. Think about how an effective plan looks and operates for your company and work with your team and plan partners to evaluate what plan design ultimately accomplishes that objective. I’m going to share a quick story on a plan that the owner thought was broken, but was able to fix, with a little help.

A long time ago, in a galaxy far far away, there was a company that wanted to use their retirement plan as a tool to help attract top talent in their industry. The retirement plan was intended to be part of a “top of the line” benefits package offered to all employees. This was a smaller company that was just getting started so a large financial commitment wasn’t possible at the start. After the first year, several of the employees who were essential to the business were not able to save for retirement the way they desired, due to compliance testing results, and were considering moving on from the company. The business owner frantically called the administration team and financial advisor to talk about how to solve this problem. In their case, the employees considering moving on were not easily replaced and were key to the success of their team and company. After evaluating several different plan design updates, the business owner presented a proposed plan re-design to their team. This new design would provide an annual guaranteed contribution to the plan by the company each year which allowed each employee to maximize their personal savings without fear of compliance requirements getting in the way. Additionally, employees were now able to join the plan and start saving for their own retirement as soon as they were hired. These two small changes enabled the company to both retain the employees who were originally frustrated and helped their team and culture grow. Over the next two years, the company more than doubled in size and the employee culture grew to be one of the best in town.

We can learn a lot from this story but there are three key takeaways that I think are important to note:

  1. The Retirement Plan is a key part of company benefit packages and can be used as a tool in both retaining key employees and attracting top talent.
  2. Retirement Plans are rarely broken. In most cases there are simple options available that inject life into the plan. Having a solid partner to help find what works best is key.
  3. The strength of a company is built on the strength of the team and the strength of the team is built on how it’s leaders show and give care to their employees. Ultimately, happy workers make for happy clients and happy clients drive a business to success.

Not every problem is solved as easily as the above story. There are many factors to take into consideration when designing an effective plan. Our team at The Joseph Group has dealt with both easy and complex plan fixes and we would love to talk to you and offer help. So if you are experiencing any frustration, either yourself or from your team, regarding the retirement plan, we would be happy to sit down and review the plan with you, even if you just want a second opinion. My contact information is below!




Matt Kruckenberg, QKA
(614) 907-8639